https://arab.news/z4d44
- Dealers say rising utilities costs, high interest rates have eroded their income and profitability since last year
- They maintain their diesel sales have dropped by 30 percent due to uninterrupted and illegal oil supply from Iran
KARACHI: Pakistani petroleum dealers on Thursday threatened to shut down petrol pumps from Saturday for an indefinite period in a bid to force the government to raise their margin.
Chairman of the Pakistan Petroleum Dealers Association (PPDA) Abdul Sami Khan announced to close all fuel stations across the country, starting 6 am from July 22.
“The prices of utilities, interest rates, and labor costs have doubled since the last year and these rising costs have eroded our income and profitability,” he said while addressing a news conference at the Karachi Press Club.
“We have been demanding to increase our margin from Rs6 per liter to Rs11 at the current prices since it is not feasible for us to continue our business at this rate,” he added while pointing out the inflation rate that hit 38 percent in May this year.
Khan said the association of petroleum dealers was compelled to announce the shutdown since the government did not fulfill its commitment of raising the profit margin.
“The government back in 1999 had promised to increase dealers’ margin to five percent but we are drawing only 2.4 percent as of today,” he continued.
The PPDA chairman said fuel sales had also suffered due to an influx of petroleum products smuggled from neighboring Iran.
“The smuggling of Iranian diesel has tanked our sales by almost 30 percent,” he informed, adding that the association cancelled the licenses of 20 dealers who were involved in the sale of smuggled fuel.
Speaking at the press conference, Tariq Tanoli, a petroleum dealer, informed the Iranian diesel was available at a discounted price of Rs55 per liter.
He added the dealers had consistently been reporting that nearly 35 percent of diesel sold in the local market was illegally flowing from Iran.
Tanoli maintained the smuggled oil was previously confined only to Balochistan province which shares a huge border with Iran, though it had now penetrated the market across the country and was even available at makeshift petrol pumps.
Tariq Hasan, another petroleum dealer, told Arab News that some of the oil marketing companies’ sales had dropped by 40 percent mainly due to the sale of Iranian diesel.
“The financial position of the companies is very tight due to 30 to 40 percent drop in their sales and squeezing margins,” he said, adding: “This is one of the reasons why Shell decided to exit Pakistan.”
Hasan believed that a strong mafia was behind the smuggling racket which was not within the control of the relevant government authorities.